An Economic Model to Assess Profitable Scenarios of EAF-Based Steelmaking Plants under Uncertain Conditions

Francesco Facchini, Giorgio Mossa, Giovanni Mummolo and Micaela Vitti
Additional contact information
Francesco Facchini: Department of Mechanics, Mathematics and Management, Polytechnic University of Bari, 70125 Bari, Italy
Giorgio Mossa: Department of Mechanics, Mathematics and Management, Polytechnic University of Bari, 70125 Bari, Italy
Giovanni Mummolo: Ionian Department in Juridical and Economic Systems of the Mediterranean: Society, Environment, Cultures, University of Bari, 74100 Bari, Italy
Micaela Vitti: Department of Mechanics, Mathematics and Management, Polytechnic University of Bari, 70125 Bari, Italy

Energies, 2021, vol. 14, issue 21, 1-17

Abstract: The steelmaking processes are considered extremely energy-intensive and carbon-dependent processes. In 2018, it was estimated that the emissions from global steel production represented 7–9% of direct emissions generated by fossil fuels. It was estimated that a specific emissions value of 1.8 tCO 2 per ton of steel was produced due to the carbon-dependent nature of the traditional blast furnace and basic oxygen furnace (BF-BOF) route. Therefore, it is necessary to find an alternative solution to the BF-BOF route for steel production to counteract this negative trend, resulting in being sustainable from an environmental and economic point of view. To this concern, the objective of this work consists of developing a total cost function to assess the economic convenience of steelmaking processes considering the variability of specific market conditions (i.e., iron ore price, scraps price, energy cost, etc.). To this purpose, a direct reduction (DR) process fueled with natural gas (NG) to feed an electric arc furnace (EAF) using recycled steel scrap was considered. The approach introduced is totally new; it enables practitioners, managers, and experts to conduct a preliminary economic assessment of innovative steelmaking solutions under market uncertainty. A numerical simulation has been conducted to evaluate the profitability of the investment considering the economic and environmental costs. It emerged that the investment is profitable in any case from an economic perspective. On the contrary, considering the environmental costs, the profitability of the investment is not guaranteed under certain circumstances.

Keywords: economic evaluation; steel plant; steelmaking process; environmental cost; direct reduction; electric arc furnace (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/1996-1073/14/21/7395/pdf (application/pdf)
https://www.mdpi.com/1996-1073/14/21/7395/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jeners:v:14:y:2021:i:21:p:7395-:d:673295

Access Statistics for this article

Energies is currently edited by Ms. Agatha Cao

More articles in Energies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().